A and B are partners in a firm sharing profits and losses in the ratio of 3:2. C is admitted into the partnership with 1/5th share in the future profits which he acquire (takes) entirely from A. Calculate the new profit sharing ratio.
Answers
Answered by
2
Given data:
- A and B are partners in a firm, sharing profits and losses in the ratio 3:2.
- C is admitted into the firm, acquiring 1/5th of the shares, completely from A.
To find: The new profit/loss sharing ratio.
Answer:
Let the total share/profit be assumed as 1.
- A's share = 3/5
- B's share = 2/5
- C's share = 1/5
Share of A and C = 3/5 + 1/5 = 4/5
Remaining share = 1 - 4/5 = 1/5
The new share B is calculated by dividing the remaining share in his profit/loss-sharing ratio, i.e., 2/5.
B's new ratio = 1/5 ÷ 2/5 = 1/5 × 5/2 = 5/10 = 1/5
Therefore, the new profit/loss sharing ratio is 3:1:1.
Profits/Losses will be distributed in their ratio/fractions accordingly,
For A:
- 3/5 of the profits/losses
For B:
- 1/5 of the profits/losses
For C:
- 1/5 of the profits/losses
Similar questions